The daily business briefing: March 7, 2017
Snap shares drop for first time since IPO, ExxonMobil announces $20 billion in Gulf Coast refinery expansions, and more
Snap stock dives for first time since IPO
Snap shares plunged on Monday, falling by 12 percent in the first major selloff of the company's stock since its high-profile initial public offering of stock last week. Snap, parent of popular messaging app Snapchat, priced its IPO above the estimated range, and the shares soared in their market debut, rising by more than 40 percent on their first day of trading. The dive came after two more analysts added to recent bearish assessments of Snap shares. Needham analyst Laura Martin gave Snap an underperform rating, putting its fair value price at $19 to $23 a share, after it closed at $27.09 on Friday. "The sexier and more glamorous a company's IPO, the more likely it is to be overpriced at its IPO date," Martin said.
ExxonMobil to invest $20 billion in Gulf Coast refineries
ExxonMobil Corp. said Monday that it would spend $20 billion over 10 years to expand Gulf Coast refineries and chemical and liquefied natural gas plants. The company's chairman and CEO, Darren Woods, said the work would include 10 expansion projects around Beaumont and Baytown, Texas, and Baton Rouge, Louisiana, and a new chemical plant somewhere along the Gulf Coast. He said the projects would add 12,000 permanent jobs to a company work force of about 71,000. The projects also will provide 35,000 construction jobs.
Republicans release plan to repeal and replace ObamaCare
House Republicans on Monday unveiled the American Health Care Act, their long-awaited proposal to replace ObamaCare. The legislation calls for freezing enrollment in the Affordable Care Act's expanded Medicaid program on Jan. 1, 2020, and capping future Medicaid funding. Until the end of 2019, states would be able to sign individuals up for expanded Medicaid. The proposal replaces insurance subsidies with refundable tax credits to help people pay for health coverage, and ends the penalty for failing to comply with the individual and employer mandates to buy insurance. The proposal also preserves two popular ObamaCare features, letting young adults stay on their parents' plans until age 26, and preventing insurers from dropping people with preexisting conditions. Debate starts in House committees this week.
GM cuts jobs at another plant with shift reductions
General Motors said Monday that it planned to cut the third shift at its Lansing Delta Township assembly plant, bringing to 3,200 the total number of job losses at three GM factories facing shift cuts. The decision came as GM prepared to stop manufacturing the old-generation GMC Acadia at the Lansing plant. The auto maker will continue making the Buick Enclave and Chevrolet Traverse there. GM said the change would take effect on May 12. "This is a very difficult day for many of the workers and their families," said Rep. Tim Walberg (R-Mich.).
Deutsche Bank shares drop, weighing down European stocks
Deutsche Bank shares dropped by 3 percent to a 2017 low on Tuesday, extending the German bank's losses since it announced plans to raise $8.5 billion in capital. The cash call raised fresh concerns about the bank's health, and dragged down financial stocks in Europe, where the market lost ground for a third straight day early Tuesday. U.S. futures pointed to a slightly lower open as the main U.S. indexes inched back from last week's records, as investors brace for a likely interest rate hike when Federal Reserve policy makers meet next week.